August 2013
Manufacturing firms responding to the August Business Outlook Survey indicated
that regional manufacturing activity expanded this month. The survey's broadest
indicators for general activity and new orders were positive for the third
consecutive month, although they fell back from higher readings last month.
Responses indicated flat shipments and only slight increases in overall
employment this month. The survey's indicators of future activity, although not
as high as in July, continue to suggest that firms expect continued growth over
the next six months.
Indicators Suggest Continued Growth
The survey's broadest measure of manufacturing conditions, the diffusion index
of current activity, decreased from 19.8 (its highest reading since March 2011)
to 9.3 this month (see Chart). The index has now been positive for three
consecutive months. The percentage of firms reporting increased activity this
month (28 percent) was greater than the percentage reporting decreased activity
(19 percent).
Other current indicators suggest growth moderated this month. The demand for
manufactured goods as measured by the current new orders index remained positive
for the third consecutive month but fell 5 points to 5.3. The shipments index
fell 15 points to just below zero, its first negative reading in three months.
Both unfilled orders and delivery times indexes were negative this month,
suggesting continued slack conditions.
Labor market indicators showed only modest improvement this month. The current
employment index, at 3.5, fell 4 points but has been slightly positive for two
consecutive months. The percentage of firms reporting increases in employment
(19 percent) exceeded the percentage reporting decreases (16 percent).
Price Indexes Suggest Moderate Pressures
The index for prices paid decreased, suggesting that price pressures are
slightly less widespread compared with July. The prices paid index edged 4
points lower. Twenty-four percent of the firms reported higher prices for
inputs this month, compared with 29 percent last month. Firms reported a rise
in prices for their own manufactured goods: More firms reported price increases
(17 percent) than reported decreases (8 percent), although 71 percent reported
no change in prices. The prices received index increased 3 points.
Six-Month Indicators Still Optimistic
The survey's future indicators suggest continued optimism among the reporting
manufacturers, although future indicators fell back from higher readings in
July. The future activity index decreased 6 points from its reading in July but
still remains well above its average readings over the past year (see Chart).
Nearly 53 percent of firms are expecting increases in activity over the next six
months. The future new orders and shipments indexes also fell back this month,
decreasing 19 points and 11 points, respectively. The future employment index
also weakened, falling 14 points. Nearly 29 percent of firms expect increases
in employment over the next six months.
In special questions this month, firms were asked about the importance of
seasonal factors in production and the scheduling of summer production declines
(see Special Questions). About 36 percent of firms indicated that they scheduled
shutdowns or slowdowns during July this year, nearly the same that indicated
shutdowns in July last year (35 percent). For July, the largest percentage of
firms (23 percent) indicated that production decreases were about the same as in
past years. The number of firms reporting that the July production decreases
were greater than usual (8 percent) edged out the number indicating that
decreases were less than usual (3 percent). However, far fewer (11 percent)
scheduled production decreases in August, and this was notably less than the
reported shutdowns in August 2012 (26 percent).
Summary
The August Business Outlook Survey indicates growth in manufacturing activity
this month, with most broad indicators pointing to positive growth. However,
employment growth is still lackluster. Firmsí responses suggest some
deterioration of optimism this month, but the six-month indicators over the past
two months remain well above those of the previous year.
Summary of Returns
August 2013
August vs. July Six Months from Now
vs. August
Prev. Prev.
Diff. Inc. No ch. Dec. Diff. Diff. Inc. No ch. Dec. Diff.
Index Index Index Index
General Busines 19.8 27.9 53.5 18.6 9.3 44.9 52.6 30.7 13.8 38.9
Conditions
New Orders 10.2 27.7 49.8 22.4 5.3 58.8 52.0 27.4 12.6 39.5
Shipments 14.3 26.0 46.5 26.9 -0.9 51.2 54.0 24.2 13.8 40.1
Unfilled Orders -1.8 15.1 65.5 18.1 -2.9 25.8 24.6 54.7 12.3 12.3
Delivery Times 0.5 14.2 62.6 23.2 -9.0 12.9 12.1 69.7 9.2 2.9
Inventories -21.6 17.7 53.4 28.9 -11.3 22.0 26.8 41.1 23.5 3.3
Prices Paid 21.5 23.9 65.5 6.6 17.3 42.1 39.4 53.9 0.7 38.7
Prices Received 7 17.4 70.8 7.5 9.9 23.9 27.1 60.0 4.1 23.0
Number of Emp. 7.7 19.2 65.0 15.8 3.5 36.2 28.8 58.8 6.5 22.3
Avg. Emp. Wrkwk 6.6 16.4 63.1 19.0 -2.6 14.6 28.6 50.4 13.6 15.0
Capital Ex. -- -- -- -- -- 27.7 27.9 57.7 7.0 20.8
Notes: (1) Items may not add to 100 percent because of omission by respondents.
(2) All data are seasonally adjusted.
(3) Diffusion indexes represent the percentage of respondents indicating
an increase minus the percentage indicating a decrease.
(4) Survey data reflect information received through August 13, 2013.
Special Questions
August 2013
1. Did you schedule plant shutdowns or production slowdowns during the summer
months this year?
July August
Yes 36.3 11.3
No 62.5 81.3
NR 1.2 7.4
2. If yes, which of the following best characterizes your situation for this
July and August?
July August
Production decreases greater than usual 7.5 5.0
Production decreases about the about the same as usual 22.5 5.0
Production decreases less than usual 2.5 0.0
NR 3.8 1.3
Total 36.3 11.3
Total (2012)* 35.4 26.2
* Percent of firms reporting seasonal-related shutdowns or slowdowns for
respective months last year (based on August 2012 survey data).